WP05 Operating Model Canvas en
WP05 Operating Model Canvas en
Content
Preface 3
Introduction 5
Operating Model Canvas 9
Creating a Canvas 21
Application and examples 24
Conclusions 27
Operating Model Canvas
The Business Model Canvas of Alex Osterwalder is a well-known approach for many people to visualise the business
model of an organisation in a single picture. This approach has gained in popularity by its simplicity and powerful graphi-
cal nature. As a result, Anderson MacGyver decided a few years ago, to use the canvas as one of our instruments in
assignments where we develop Business/IT strategies and IT roadmaps for our clients. And we still do.
On the other hand, when we tried to extend the canvas into the IT domain, the business model canvas also appeared to
have its limitations. It is our core business to develop a single visualisation which appeals to both business and IT and
which is clear and easily recognised. A logical alternative to adequately represent IT landscapes and IT roadmaps would
be the enterprise architecture approach. However, that immediately led us deeply into detailed models and structures,
lacking the powerful communication that is required towards directors and line managers. In the end, we developed our
own solution that is described in this whitepaper: The Operating Model Canvas.
We are pleased to invite you to read the complete whitepaper to explain the works of our Operating Model Canvas. But
we do want to share with you in this preface that the Operating Model Canvas has now become an integral part of the
Anderson MacGyver approach. Almost all our clients have A0-posters on the wall with their Operating Model Canvas.
They use it to show the impact of digital transformations, to visualise IT roadmaps or project portfolios, new business
models et cetera. This approach has been used so frequently that we felt it was time for a whitepaper. We hope you will
be inspired as much as we are, and that it will provide you with a powerful means of visualisation for both business and
IT. The canvas will help organisations to reflect on the most effective and value added use of digital technology and to
help shape the IT landscape.
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Operating Model Canvas
Authors:
ALBERT SPROKHOLT
Drs. Albert Sprokholt is principal consultant at Anderson MacGyver in the field of strategy, governance,
information management, architecture and sourcing of IT and IT services. He has over 30 years of IT
experience in various sectors such as logistics, manufacturing, technical services, financial services,
utilities and government. He worked as CIO managing complex IT organizations (Bührmann-Tetterode
and AEGON) and was executive member of the board of Morgan Chambers and the European
Executive Committee of EquaTerra.
He is lecturer at Nyenrode Business University, the Academy for Information Management and the
Antwerp Management School on IT services, governance and sourcing. He is currently working on a
dissertation on the subject of the governability of IT services.
FABIAN HAIJENGA
Fabian is experienced in the field of business (digital) architecture and sourcing. He has practical
experience as a consultant and as a project lead. Fabian is known as a conceptual thinker and is not
afraid in truly understanding complexity and dependencies. As a consultant Fabian advised in the field
of digital and sourcing strategies, sourcing, business architecture both national as internationally.
Within Anderson MacGyver Fabian leads the development of AMG methods.
HARRY BOERSEN
Harry is an experienced consultant in the field of IT architecture, agile development and digitization. He
also has experience as an interim manager. In addition, he assists companies in (out) sourcing deals as
SME.With regard to (IT) architecture Harry assists organizations in drafting architectures, and gives
substance to principles. As a driving force he creates realistic road maps and helps organizations to
realize them. Currently, Harry is involved in far-reaching digitization projects mostly in agile teams.
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1. Introduction
G
etting business operations and IT on the same page is value chain.
important. A lot has been written about this topic. Each Many times, the IT organisation has insufficient know-
time it appears that IT is unable to deliver the services ledge and understanding of the business operations
that the organisation expects. The fact that the busi- and the context it operates in. IT strategy and plans
ness sometimes works around IT to obtain services (known as are repeatedly defined from an IT perspective, based
shadow-IT) is symptomatic. Business operations does not on technical possibilities and internal needs. Business
have the necessary sensitivity to understand all the challenges operations and IT are not effectively working together
of IT in meeting their demands and expectations, like how to in determining which technologies support the realisa-
maintain service levels and to deliver changes on time. On the tion of business objectives. Therefore, different definiti-
other hand, IT is lacking the necessary insight in the root ons and interpretations of business reality continue to
causes of business problems. They strongly believe in their grow inside and outside the IT organisation. Increased
own skills and capabilities (an approach that excludes users by poor communication, a vicious circle starts to
from problem solving), are convinced that answers can be develop.
found in using more or different IT applications, and come up Anderson MacGyver wants to break through this
with solutions they feel are the best for the organisation. When circle. This whitepaper offers tools to create links
problems arise or projects fail, this is often caused by the lack between the board, directors, business units and IT
of mutual understanding and communication between busi- organisation by placing IT directly into the business
ness and IT. context. For this purpose Anderson MacGyver has
developed a Canvas method: The Operating Model
Business speaks the language of the market sector it Canvas, in short: OMC.
operates in, and IT likes to speak the language of its own
profession and processes. To fully understand what is happe-
ning in the business, IT should adopt the business language
of the organisation, of their business colleagues, and of the
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Operating Model Canvas
1.1 Working with people 1 is that we use only the information that is directly at hand. Searching
Communication between business operations for information takes a lot of effort and is not included. System 1 is so
and IT organisation is all about working effective that people do not realise that they are using limited informa-
together and making decisions together. tion to come to a decision or judgement. People take decisions and
Daniel Kahneman, Israelian psychologist and come to conclusions based on their intuition (gut feeling). Kahneman
Nobel prize winner, has developed several describes this as ‘What You See Is All There Is’: WYSIATI.
theories on how people think, absorb informa- People naturally tend to apply their own perspective and will not auto-
tion and how they come to decisions. matically place themselves in the context of others. System 2 is activa-
At the basis of Kahneman’s work is the sepa- ted when one needs to think about an answer, such as in calculating
ration of our thinking into System 1 and the sum of 314 + 405. The answer is formulated by System 2: 719.
System 2. System 1 is our automatic pilot and The thinking from within these 2 systems also explains the vicious
can be described as quick, automatic, emoti- circle between business operations and the IT organisation. Both sides
onal, stereotypical and unconsciously. System gladly continue to communicate in System 1, in their own comfortable
2 is the opposite and equals slow, occasio- domain of thinking.
nally, logical, calculating, consciously and
demands effort and energy. The IT organisation prefers to adopt an approach which ensures
In-depth research shows that people have a thoroughness, a clear scope, structure and a strong focus on the
strong preference to approach their daily acti- current process. Albeit with all good intentions, they still miss the point
vities from within System 1. This system takes because they are insufficiently open to change, new insights, and to
us little effort, is fast and our automatic judge- learning experiences and feedback from the business owners and their
ments are often right. You know the feeling users. It creates a comfortable but imaginary world, that is more and
that you have arrived at work for example not more surpassed by the fast pace of the real world.
remembering how you got there? That is part To break this vicious circle, a new and shared vision needs to be crea-
of System 1. An important element of System ted using System 2 thinking. This will create a new model that can then
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Operating Model Canvas
be handled by business and IT using System 1 in their daily operations, makers in the world of IT users.
unless the next wave of change is expected. Business models are used as support to
The canvas addresses exactly this issue. It helps people to break out provide insight in business activities and
when they are, like many times, stuck to thinking in System 1. The processes and to increase the understanding
canvas invites people to think outside the WYSIATI circle and provides of others. Architecture overviews depict the
a common and shared means of communication. This approach forces complex interaction between parts of busi-
participants to apply System 2 thinking. ness systems. The objective of these models
is to clarify the interconnection, to develop
roadmaps and action plans, including the
1.2 Communication between business operations related investments, and to subsequently
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2. Operating Model Canvas
T
he Operating Model Canvas provides the
connection between the business model on
the one hand, and the business processes BUSINESS MODEL
and information, including the related IT
services, on the other hand (see figure 1). The
canvas has been setup from a business perspec-
tive, not from an IT perspective. This simplifies OPERATING MODEL CANVAS
and improves the communication. The Canvas
strives to visualise and describe the essence of
the business on a single canvas (A0 poster). We
have been inspired for this by the books The
back of a Napkin and Bla Bla Bla written by Dan
PROCESSES DATA
Roman who describes the power of visualisation
in communication.
IT SERVICES
The business model guides the Canvas. The
Canvas visualises the mission and vision of the
board and managers on the organisation of the
company based on its business activities. This
business operations and IT have a single and
shared model. Using the Canvas, a detailed view
of the processes, information domains and the
supporting IT services can be developed.
Figure 1: Positioning the Operating Model Canvas
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Operating Model Canvas
The Canvas contains all primary and supporting activities. Customers organisation needs to execute to realise its goals
and end users, the channels and the portfolio of an organisation. The and strategy. For the theoretical framework, we
context of the Canvas consists of the customer and supplier activities have deliberately chosen models and theories
in the company chain. It shows how customers and suppliers are part that are widely known and have been proven in
of the operating of the organisation. Thus, the model lets you see the practice
internal and external interactions as well as the information exchange
between participants in the chain. 2.1.1 Business Model Canvas
For the past years, the Business Model Canvas
The Canvas is not all-inclusive. It does not depict the organisational has been the commonly used method for organi-
structure, like locations of legal constructions and it does not show sations to model their business strategy. It provi-
hierarchies. This is essential to ensure that the business activities and des a structure to develop and visualise the market
information services are subject of the discussion, without having to proposition of a business. The result is a shared
involve configuring the organisation or legal structures. Many reorgani- product of every person that supports the realisa-
sations do not influence the operating model of a company. The tion of the proposition and the development of the
Canvas will also remain as is. A reorganisation is often merely a diffe- business model. Customers and customer propo-
rent way of working within the same objectives and within the same sition are key. The cooperation with partners and
context of the company. suppliers is also important, as well as determining
the key resources to realise the proposition. The
business model is primarily a means of communi-
cation to ensure all involved think within the same
2.1 Proven models as the basis of the canvas context and the same proposition. The Business
Anderson MacGyver has used concepts and ideas that find their origin Model makes sure that everybody knows what is
Figure 2:
in the Business Model Canvas by Osterwalder and the Value Chain by important and what not, that it is clear who the Business Model Canvas
economist Michael Porter. These models describe the activities that an stakeholders are and that everybody has the same by Osterwalder
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STRATEGIC KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITIONS RELATIONSHIPS SEGMENTS
KEY CHANNELS
RESOURCES
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Operating Model Canvas
goal in mind. The Canvas makes sure that everybody thinks from the • Support activities required for primary or
same strategic business perspective, and not from a specific problem other support activities that help with the
definition that often limits potential solutions. Working from the perspec- delivery of services that are not specifically
tive of the proposition also increases the domain of possible solutions. aimed at the customer, like resource
Looking at the research of Kahneman, What You See Is All There Is procurement, technology and human
(WYSIATI), this approach encourages thinking from within System 2. The resources.
Canvas stimulates, or forces, every participant to think within the same • Firm infrastructure is not directly related to
context and with the same background. It helps to eliminate differences specific primary activities, but supports all
in interpretation or background in an early stage. Those involved will activities, like administration, finance and
better understand what is going on in their environment and are encou- IT infrastructure.
raged in a nice way to think about this. At the strategic level this offers
additional support in making substantiated decisions. The primary business activities directly
support the delivery of services to customers
2.2.2 Value chain model and are in that respect distinguishing in
Centrally in the development of the Canvas is the term ‘activity’ or comparison to other organisations. Support
‘business activity’. The term activity means everything that needs to be activities will normally have a more generic
done (execution of actions and tasks) to make the business model character. They will be very similar within diffe-
work. Activities can be grouped by their nature or function, like procu- rent organisations.
rement, marketing or production. Porter differentiates between different
types of business activities to indicate their meaning, characteristics Firm infrastructure supports the whole organi-
and importance for the business execution: sation, but at the same time provides a
• Primary activities that cover the creation of the product or service, context within which other activities take
Figure 3:
the sales and delivery to the customer, including after sales activi- place. The firm infrastructure needs to be Value Chain
ties. configured in such a way that it offers the by Michael Porter
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FIRM INFRASTRUCTURE
HUMAN RESOURCES
SUPPORT
ACTIVITIES TECHNOLOGY DEVELOPMENT
PROCUREMENT
MARGIN
INBOUND OPERATIONS OUTBOUND MARKETING SERVICE
LOGISTICS LOGISTICS AND SALES
PRIMARY ACTIVITIES
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Operating Model Canvas
appropriate context for the other activities to offers a solution for a customer problem using systems (Grönroos, 2000).
function optimally. For example, when a customer withdraws money at an ATM, the delivery
Business activities deliver goods and/or servi- of the service takes place where the customer (system) meets the bank
ces to other business activities in the system (the ATM). It is important to note that the value of the service is in
company chain, or to the business activities the end determined by the customer: what is the effort required, is the
of customers. In the case of consumers, it will service adequately delivered and how is the service appreciated (see also
concern a product or service directly delivered Anderson MacGyver Whitepaper 01: ‘A perfect match – Fit for purpose
to the consumer. The business activities of the service providers’).
organisation are dynamic and are continuo-
usly influenced by changes in the business
context or from the customer/consumer. It is 2.3 Build up and layout of the canvas
important therefore to map the business The Canvas is developed from a generic foundation, the base layer, upon
context and analyse the related characteris- which multiple layers can be displayed using different aspects. The base
tics. These characteristics include among layer shows the business activities and the stakeholders in the chain:
others the dynamics, dependency on time, customers of the company, end consumers and suppliers. The aspect
dependency on location, specific require- layers on top of the base layer may for example show IT services or appli-
ments (eg legal, compliance, knowledge) and cations, data domains, project portfolio, financial data, et cetera. We will
the diversity of the customer group that is come back to this in more detail.
being served. The processes that are execu-
ted within the business activities produce and 2.3.1 Scope of the canvas, chain and organisation
deliver the services to the customer. A service The scope, the value chain, is determined by identifying which services the
is also a process; the delivery of the service organisation delivers, to which customer groups, and who the most impor-
Figure 4:
takes place through interaction between tant partners are in the chain to deliver goods or services required to deli- Operating Model Canvas
customer and supplier, whereby the supplier ver the final product. Potential users of services that are not a customer of example
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Operating Model Canvas
GOVERNANCE CONTROL
PORTFOLIO
VALUE CHAIN
VALUE CHAIN
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Operating Model Canvas
the activities of the organisation that provide the service. sequence is based on importance or volume.
Supporting activities are displayed separately underneath the primary Information is shown in the channels to a limi-
activities, emphasizing their supporting nature. The position of Procure- ted extent. The communication channel itself
ment needs proper attention since it also visualises the interaction and usually implicitly indicates what type of activi-
exchange with suppliers. Important suppliers or suppliers that provide ties is taking place in the channel. Other
an almost complete business activity, should be displayed on the details can be provided on the Canvas, like
Canvas. Some activities that provide value to the customer could be online platforms, key services, locations et
placed into the support activities. For example, providing administrative cetera.
information to customers, thus adding additional service, ease of use
and value to the delivery of products and services. By applying visuali- 2.3.3 More aspects on the canvas
sation techniques, like colour, line thickness et cetera, parts of the Specific information like cost, project portfolio’s
Canvas can be made to stand out or grouped explicitly. or capabilities (see TOGAF) are not displayed
on the base layer of the Canvas. Costing and
Just like in the Business Model Canvas, customers are segmented in revenue amounts are also not included, since
the model based on their importance, like revenue, volume or added this information is more fluid than the other
value of the segment. If 80 percent of revenue is with consumers and information elements on the Canvas. These are
20 percent with business customers, then this division is also displayed visualised with aspect layers. Using this
on the Canvas. Including customer segments in the model allows for approach secures a single foundation for
showing the interaction and information exchange per segment. Activi- communication between business operations
ties can also be included, especially if they differ per segment. The use and the IT organisation and leaves room for
of social media for example can be displayed in a segment as well. further specifications required. The basis for all Figure 6:
Distribution and communication channels are displayed on the Canvas specifications remains the same, a single and The Operating Model Canvas
consist of a base layer
to show the ways of communication: by post, e-mail, direct sales, deli- mutually supported Canvas. supplemented with aspect
very, by call centre, by pickup points, and in stores. Again, the The IT portfolio is also not included on the layers
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DISPLAYS PURPOSE
BASE LAYER The base layer displays the business activities and the stakeholders in the chain: customers, consumers and suppliers
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Operating Model Canvas
Canvas. After development of the Canvas base layer, an additional detailing of the IT
Services can take place in for example an additional aspect layer of the Canvas. Exis-
ting IT services can be linked to business activities to determine if the characteristics
of the IT services match with the characteristics of the business activities. If not, that
could be a reason to organise IT services differently.
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3. Developing the canvas
T
he approach for developing the Canvas is based on workshops.
The workshops ensure the direct involvement and contribution of
participants, that together develop the operating model and visu-
alise it on a big A0 poster.
The approach for developing the Canvas is based on workshops. The
workshops ensure the direct involvement and contribution of partici-
pants, that together develop the operating model and visualise it on a
big A0 poster.
Further detailing of the base layer takes place with all stakeholders that
have an interest in analysing the business activities and IT service port-
folio. Then the most important characteristics of the business activities
can be determined, and how the interaction with customers and
suppliers works, and what the context of the company or organisation
looks like.
Before the start of the workshops, a first draft of the Canvas is develo-
ped using the information available. Sources are for example the stra-
tegic plan, a Business Model Canvas or architecture documents. If no
information is available, the scope of the Canvas can be developed in
preliminary workshops. This initial draft will be further developed with
stakeholders of the business operation and IT organisation in work-
shops. Often a few workshops (three) suffice for a good result. This
enables a high level of participation of those involved, rapid improve-
ment of the quality of solutions through the different perspectives, and
strong delivery of shared results by effective communication and
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Operating Model Canvas
• Scope of Operating Model Canvas • (Initial) Canvas with base layer • Final version of the Operating Model
• Overview of business models, • Aspect layers on the Canvas Canvas including aspect layers
Result
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common understanding. of the business language display links between activities, provide
The large A0 size poster is not specifically concrete context and quickly facilitate discussions about the content.
used to allow more information on the Common grounds and shared views develop, since all participants
Canvas, but it a group of ten people can acti- continue to see the complete picture. People do not get the chance to
vely stand in front of it to discuss. In this way, fall back into System 1 thinking, or to limit their discussion to their own
the group members can effectively debate the domain. The complete organisation is displayed on the Canvas and
content, providing everybody the opportunity that stimulates employees to think about it as such.
to use the models and sketches on the
Canvas to support his or her views. As such Based on the completed operating models the IT organisation can
all are using the same context to communi- continue to analyse the IT aspects in more detail. Several examples are
cate and discuss. provided in the next chapter.
Anderson MacGyver uses these prints,
posters in meetings for example with the
management board. With the A0 posters we
indicate where change takes place, what the
consequences are, who is involved and what
will be required. It strikes us every time how
discussions and decisions flow more easily
when one is in front of a large poster display-
ing the whole organisation, instead of using
the more passive slide presentations. Using
presentations, the overview and coherence
Figure 7:
Basic approach ‘Developing can be easily lost by non-insiders or those
the Operating Model Canvas’ indirectly involved. The A0 overviews and use
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Operating Model Canvas
T
he Canvas has not only proven itself as an effective tool for diffe- • Financials: Savings, cost and investments can be displayed on the
rent departments to talk with other stakeholders in the company. Canvas, showing directly the balance of financials across the busi-
It is also a valuable tool to develop a transparent IT vision from a ness activities
business perspective. This IT vision can be used to make the • Information management: displaying the departmental plans,
proper decisions about IT investments and the IT structure, both tech- strategic objectives, and conditions or focus on the Canvas, clearly
nological and organisational. The Canvas can also visualise other areas visualises the interdependency and consistency of these plans
where business operations and IT interact, such as: • Resource management: The model can demonstrate which
• Value analysis: which business activities add value as defined in resources (capabilities, personnel, company asserts, IT infrastruc-
the customer proposition and which activities are required to ture, applications) are required for the execution of the business
support business operations and/or other activities activities. For certain type of resource, a so-called landscape over-
• Organisational context: the Canvas shows the links between activi- view can be developed that support the analysis of for example an
ties of the internal organisation with the activities of customers and enterprise architecture or a sourcing strategy
suppliers. This provides insight and understanding of the impor-
tance of the interactions and the information exchange with custo- There might be parts of the Canvas that are subject to intensive
mer and supplier systems, and how this should be supported and change. More detailed analysis could be required, whereby the Canvas
organised is used to secure the consistency of links and interactions between the
• Sourcing strategy: For which business activities, could the IT related elements.
support be sourced from service providers that offer standard IT
services in the market, and for which business activities is it strate-
gically important to keep the IT support in-house, potentially with
the help of business partners
• Portfolio management: visualisation of projects or programmes
Figure 8: Sample Canvas displaying the
mapped on the business activities providing insight in the focus results of the business activity analysis of
and importance Royal FloraHolland
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Operating Model Canvas
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5. Conclusions
O
ver the past few years Anderson to apply an outside-in view. This creates more room for new (digital)
MacGyver has used the Operating insight and takes all links and relations with other activities and stake-
Model Canvas many times. The holders into account.
model has proven to be a powerful We have seen in practice that results can be achieved rapidly. It also
instrument to form a well-defined and cohe- provides a shared understanding of the way the business model
rent vision on the business models and the works. This is of great importance to many of our clients: finally a
resulting vision on the IT service portfolio. It common representation and shared view of the actual business.
provides the essential information to deter-
mine the strategic IT agenda, founded on the The Canvas is developed together with the employees of our clients
business strategy and envisioned business who therefore see it as their own model of the organisation. Especially
operations: business drives IT and not vice when brand style and colours of the company are used. The Canvas is
versa. Working together on a joint model a model that helps business and IT to effectively communicate with
helps to get a comprehensive and shared each other: it creates a common language and shared context to
view on the business model and on the develop, replace and improve IT projects and services.
improvements in business activities that requi-
red for managers to realise their business
objectives.
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Het Operating Model Canvas
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Innovate, change and operate digital agenda. With the resulting modern and focused organi-
„We create value through IT for our clients by stimulating zation, the business is ready to become leading in the digital
them to innovate, by improving the way they operate and world of tomorrow. We are committed to help our clients and
by enabling the change they need.” apply the necessary changes to their organization.
Anderson MacGyver as a team We are recognised for the seniority, drive and experience of
Anderson MacGyver supports organizations with its own our teams, that are committed and result driven. Applying our
authentic approach to realise the envisaged goals. We methodologies, based on latest scientific insights, we are
initiate innovation with true passion and together with our passionate to initiate innovation and help our clients
client we establish a challenging and exciting strategic transform.
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Operating Model Canvas
REFERENCES
Grönroos, Ch. Service Management and Marketing: A Customer Relationship Management Approach. John Wiley & Sons, 2000.
Porter, M.E. Competitive Advantage. The Free Press, 1985.
Haijenga, T.F., Boersen, H. De brug slaan tussen bedrijfsvoering en IT. FD/Boardroom IT, 2014.
Sprokholt, A. A Perfect Match. Anderson MacGyver whitepaper 01, Anderson MacGyver, 2016.
Osterwalder, A., Pigneur, Y. Business Model Generation. John Wiley & Sons, 2010.
Kahneman, D. Thinking Fast and Slow. Penguin Books, 2012.
Roam, D. The Back of the Napkin, 2009.
Roam, D. Bla Bla Bla, 2012.
Weill & Ross IT Savvy, 2009.
COLOPHON
Translation and redaction: Hans-Robin Oei
Production: Anderson MacGyver B.V. Photography: John Simons Design: Martin Wolber
Publication: Anderson MacGyver B.V. | www.andersonmacgyver.com | [email protected] | @andersonmcgyver at Twitter
Version: This version is an updated and translated version of whitepaper 05 Operating Model Canvas November 2015
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